Household water and sewerage costs are to rise ahead of inflation - adding an average £13 a year to bills - after the regulator agreed to price rises that will be as high as 5.5 per cent in some areas.

It squeezes household budgets as the average
salary in the UK rose by less than two per cent in 2012.Families have already had to fork out for
energy, home phone and broadband price hikes in the last year.

Those living in the south east will see the biggest rise in their water bills - £23 will be added in the 12 months from April - while Yorkshire residents will pay the least at £12 extra.

Up: The average household water bill in England and Wales will go up by 3.5% next year - around £13

Thames Water will see the biggest
percentage rise in water and sewerage bills with an increase of 5.5 per
cent, leaving households with an average bill of £354, according to
Ofwat.

Southern Water
bills will rise by 5.3 per cent with an average payment of £449 while
households supplied by Wessex Water will face an average bill of £478 -
an increase of 4.9 per cent.

Those
supplied by South West Water will see bills fall by 7.3 per cent after
the Government pledged contributions to reduce each household's bill by
£50.

However, water and sewerage bills in that region remain the highest in the country, with households paying an average of £499.

Companies have raised their prices to the highest levels allowed by the regulator Ofwat to pay for £25billion of improvements to the water network.

Map showing the price increases across the UK. South West Water customers will see bills drop thanks to a Government Contribution, which reduces the cost by £50 a year from April. Without this, the combined average bill would increase by two per cent

In 2009 Ofwat put limits on how much
water and sewerage companies could charge between 2010 and 2015 - with
the majority of bills remaining in line with inflation. The regulator says that it stopped firms from imposing hikes of 10 per cent.

Ofwat chief executive Regina Finn
said: 'Back in 2009, companies wanted bills rises of 10 per cent above
inflation. That didn't chime with what customers told us they wanted, so
we said they could only increase bills in line with inflation.

'We
understand that there is huge pressure on household incomes, and any
rise is unwelcome. Inflation is driving these increases.'

'We
will make sure customers get value for money and if companies fall
short in delivering their investment promises, we will take action,' Ms
Finn added.

'In the past seven years, we have made companies pay out around £550 million where they have underperformed.'

The new charges will vary for households depending on their supplier and whether they have a water meter, Ofwat said.

The increased bills will help pay for an investment programme worth about £25billion between 2010 and 2015, the regulator added.

Calls to National Debtline about water bill debts have gone up by 251 per cent since 2007. The charity said that in the last year alone they've gone up by 21 per cent.

A spokesman said: 'It’s one of the fastest growing debt
problems we’re dealing with. We took more calls on water debts last year
than we did on rent or mortgage difficulties.'

Ann Robinson, from comparison website uSwitch.com, said:
'Ofwat's announcement follows a wave of energy price hikes and will
leave many households struggling to stay afloat. In total, consumers
will now have to find an extra £107 a year to meet the cost of their
essential utility bills.

'Households now face forking out £1,740 a year
on energy, water and sewerage alone. With incomes remaining stagnant,
this will be another squeeze on family finances and will no doubt cause
sacrifice and hardship for many.'

Last week Ofwat announced proposals to change the way it regulates the water and sewerage sectors to ensure more sustainable water use.

The regulator also welcomed a report on the Draft Water Bill, which has identified potential benefits of £2 billion by changing the way water is managed.